Ned Naïve operated several franchise stores for a large company, and, at the home office’s suggestion, consolidated its payroll and accounting functions with Andy the Accountant. Andy is not a CPA. Last year, Andy began embezzling the taxpayer’s escrowed payroll tax withholdings and failed to remit required amounts for the four quarters. The IRS assessed penalties on Ned for failing to make the proper withholding deposits during the year. What are factual issues, legal issues and primary research questions on this case?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law
Section: Chapter Questions
Problem 41DQ
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Ned Naïve operated several franchise stores for a large company, and, at the home office’s suggestion, consolidated its payroll and accounting functions with Andy the Accountant. Andy is not a CPA. Last year, Andy began embezzling the taxpayer’s escrowed payroll tax withholdings and failed to remit required amounts for the four quarters. The IRS assessed penalties on Ned for failing to make the proper withholding deposits during the year.

What are factual issues, legal issues and primary research questions on this case?

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